The official blog of Illinois Issues magazine,
published by the Center for State Policy and Leadership
at the University of Illinois Springfield

Thursday, April 19, 2012

Quinn rolls out his plan for Medicaid

By Ashley Griffin

After a group of legislators failed to agree on a plan to reduce Medicaid costs, Gov. Pat Quinn released his own proposal today.

Quinn’s plan to defer $2.7 billion in Medicaid growth calls for $1.35 billion in savings and a $675 million rate cut to health care providers. He is also proposing a $1-dollar-a-pack cigarette tax increase, which he says would bring in $337.5 million. If spent on Medicaid costs, that money would result in a $337.5 million match in federal funds.

In an effort to help mend the “broken” system, Quinn pitched a plan with more than 50 individual proposals, including services that could be reduced or terminated. The proposed plan emphasizes changes to utilization controls, which would limit how many times a patient could use a certain service or cap the cost of treatment he or she could receive.

Some of these changes would include:

Limiting eyeglasses to one pair every two years.

Limiting prescriptions to five per month for adults and children.

Limiting diapers for adults and children to 200 a month. The current limit is 300.

Under Quinn’s recommendations, patients would be charged a $10 copay for going to the emergency room for nonemergency treatment. A $3 copay would be required for generic drugs. Currently, copays are only charged for brand name prescription drugs. The proposal also includes 10 percent cuts to hospice care, home health and medical equipment.

Some so-called optional services would be eliminated. Adult dental care and the Illinois Care RX, which is a prescription drug program that helps low-income seniors pay for their medicine, are on the chopping block to be terminated.
Both cuts are controversial, and if Quinn gets his way, approximately 180,000 seniors would be affected by the loss of the Illinois Care RX program. Adult dental care would affect 172,000 Illinoisans. Some experts believe eliminating services such as dental care can push costs to other, more costly areas of the budget. Quinn is also calling for the elimination of group therapy in nursing homes, podiatry services for patients who do not have diabetes and chiropractic care for adults.

The push to reduce Medicaid costs comes in wake of Quinn’s “rendezvous with reality” budget address in February, when he told lawmakers they could not go home until they pass comprehensive Medicaid reform and called on a Medicaid working group to help solve a $2.7 billion crisis — an amount Quinn says would carry over into 2014 if lawmakers do not act now.
“We just can’t afford to [put off paying bills]. The system would implode, and it would eat up everything in state government,” Quinn said in a news conference. He cited recent Civic Federation projections that Medicaid spending could reach $21 billion in unpaid bills by 2017.

But rate cuts for health care providers and the proposed cigarette tax increase were nonstarters with Republican members of the Medicaid working group.

“His plan that you see here today does not reduce the Medicaid program by $2.7 billion. In fact, half of his program relies on a tax increase that will simply be used to fuel more spending and a near $700 million cut to Medicaid providers like hospitals and nursing homes, who already suffer from some of the lowest rates and the longest payment delays in the entire nation,” said Mattoon Republican Sen. Dale Righter, a member of the Medicaid working group. “And what’s so ironic and sad about that is that if you cut rates by near the measure of what the governor is talking about, fewer providers … will take part in the Medicaid program. The fewer providers there are, the less access there is for health care.”

Hospitals argue that they would take too large of a hit under Quinn’s proposal.
“The Illinois Hospital Association (IHA) and the hospital community are deeply concerned about the governor’s Medicaid proposal calling for a major rate cut to hospitals of about $350 million, or approximately 8 percent. This proposed rate cut is in addition to about $150 million in other proposed reductions directly targeted at hospitals,” Danny Chun, vice president for corporate communications and marketing for the Illinois Hospital Association, said in a prepared statement. “While we commend the governor for taking some positive steps
— including incorporating several of IHA’s savings alternatives
— the proposal is still too drastic and too rash to impose on the state’s already fragile health care system. Simply engaging in a math exercise to fill a budget gap is the wrong approach that will hurt patients.”

But Quinn said Medicaid patients should not be asked to bear all the pain of cuts. “We have to ask our providers, those who are involved in the health care system, to tighten their belts, and we are doing that by asking them to make economies of $675 million,” Quinn said.

A cigarette tax increase has failed to pass in both chambers despite many recent attempts at reviving the idea. The Senate did approve an increase in 2009, but it was shot down in the House.
But Quinn argued that the increase would bring in money and deter smoking, which would save future health care costs. Senate President John Cullerton has been a longtime backer of a cigarette tax increase. “It's good fiscal and health policy and it should be part of our Medicaid stabilization plan,” Rikeesha Phelon, a spokeswoman for Cullerton, said in a written statement.

Righter challenged Quinn to put his plan into legislation to be called for floor votes as early as next week. “And then we’ll find out whether or not the working group’s work is done,’ Righter said. “I have not taken a poll of the members of the General Assembly, but I suspect the working group would go back to work.”
For now, the legislative group plans to continue its work and has a meeting scheduled for Tuesday.

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The bureau follows state government from the Capitol Press Room and writes articles for Illinois Issues magazine, published by the Center for State Policy and Leadership at the University of Illinois at Springfield.
Contact: illinois.issues@gmail.com